TracFone, the nation’s largest MVNO with fully 22 million U.S. customers, said it supports the proposed merger of Sprint and T-Mobile. “TracFone believes that the merger would not only result in more rapid deployment of a nationwide 5G network, but also create a more competitive wholesale marketplace,” the firm wrote to the FCC.
TracFone’s statements are noteworthy considering that a major argument against the merger of Sprint and T-Mobile is that such a combination could reduce the number of options for MVNOs like TracFone.
But TracFone told the FCC that it believes the opposite is true.
“While today’s wholesale market for MVNOs is generally competitive, the existing four nationwide MNO’s from which TracFone can purchase network capacity are not equivalent alternatives in all markets. In rural areas, T-Mobile and Sprint historically have not offered sufficient coverage and/or speeds in these geographic pockets of the United States,” the firm wrote in its recent filing with the FCC regarding the proposed merger of Sprint and T-Mobile. “With the merger of T-Mobile and Sprint, and the resulting more rapid deployment of a nationwide 5G network with broader coverage, greater capacity, higher throughput and lower latency, the wholesale market place will be more competitive with three full service competitors, rather than two. The increase in competition should have the greatest effect in rural areas. The resulting excess capacity would be available for MVNOs in these areas as a third option that has not been available in the current marketplace.”
Added the company: “When T-Mobile delivers the stronger 5G network it projects, MVNOs may also explore the opportunity to enter new markets, including the Internet of Things, and other 5G-enabled wholesale services.”
TracFone, owned by Carlos Slim’s America Movil, operates a number of MVNO brands in the United States including Straight Talk, Simple Mobile and Walmart Family Mobile (which it acquired from T-Mobile in 2016). Although the company doesn’t disclose its carrier partners, TracFone is widely reported to make use of mobile network services from all of the nation’s major network operators.
TracFone isn’t the only MVNO to voice support for the merger of Sprint and T-Mobile; other MVNOs like Mint Mobile have also said they support the transaction. Such support is important considering T-Mobile has reportedly been engaging with smaller operators and MVNOs in order to generate support for the merger.
TracFone was not among the initial batch of companies that filed comments on the proposed merger of Sprint and T-Mobile in August. Companies like C Spire and Dish Network said they opposed the transaction, while other companies like AT&T and Verizon sat on the sidelines and did not offer an opinion.
Sprint and T-Mobile have argued that their proposed merger would increase the number of workers that the two companies employ, while also allowing the merged company to more quickly deploy a nationwide 5G network.
The FCC, Department of Justice and other government agencies are currently reviewing the transaction. Sprint and T-Mobile executives have said they hope to consummate their merger early next year.